German Led European PMI Surge Drives EUR Higher

The euro rebounded against the dollar Thursday after dropping sharply Wednesday on data that showed better-than-expected growth in the eurozone’s manufacturing and services sector.

European manufacturing improved in October, after Markit Research Group said the October Purchasing Manager’s Index came in at 50.7, compared to 50.3 in September. Germany led the region with a 51.8 reading, up from 49.9 in September, more than compensating for tepid growth in France.

“The German data was particularly encouraging because it suggests that the dip in September was temporary, caused by the geopolitical tensions in the region rather than a secular decline in demand,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management.

The euro traded at $1.2669 Thursday morning, compared to $1.2646 Wednesday night.

The euro rose sharply against the pound early Thursday morning, rising as high as £0.7919 before settling around £0.7893. It was supported by weakening retail activity in the U.K as data showed retail sales declined by 0.3% in September, further than the anticipated 0.1% decline. The shared currency EURGBP, +0.14%  traded at £0.7881 late Wednesday.

via MarketWatch

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